Everything we know about marketing is wrong, warned management guru Don Tapscott, talking at the IDM annual lunch on Thursday 26 March. Tapscott, adjunct professor at the University of Toronto and the author of eleven books including Wikinomics and Grown Up Digital, also told Marketing Week in an exclusive interview that direct marketing will “fail miserably” unless the entire industry changes focus.

Tapscott – rated alongside Bill Gates and Philip Kotler as one of the top business minds of his generation – claims that DM risks losing younger audiences who will “shut you out” because “you have not considered the interests of the person”. Tapscott says that many consumers, particularly the younger ones, consider direct marketers to be “spammers”.

He argues that direct marketers need to think outside their usual parameters when constructing campaigns. He says that building relationships has to go beyond simply having names on databases to creating a method of operating where consumers can actively inform marketers of their interests.

“Why not create an environment where I tell you what I’m interested in knowing about? Right now, personally, I am not interested in getting information in cars because I just bought one,” he explains. “But in two years, when my lease is up, I’m going to be really interested.”

Another way of building relationships, Tapscott says, is through influencing networks. This is particularly relevant for younger consumers who are connected with friends and family through multiple methods, such as Facebook, Myspace and Twitter.

“If you can influence people in the context of their networks, that’s how good things happen,” he adds. “Direct marketing is becoming indirect.”

It isn’t just direct marketing as a discrete discipline that Tapscott has in his sights. He is equally forceful about the need for change in the measurement of marketing. He argues that companies need to stop thinking about the old ways of monitoring success using the classic ‘Four Ps’ method.

Instead, he suggests marketers must now treat their wares as entertainment as much as products or services. This is particularly important to reach younger consumers. He says: “If we look at future of marketing through the eyes of new generation, who will dominate marketing in 21st century, they don’t want products, they want experiences.”

Tapscott claims that more than half of young people believe that “having fun with a producet or service is as important as what product or service does.” He says that the most successful products of the next few years will be those which are backed by services offering experiences.

He cites Nike and Apple’s partnership as a good example. The companies have a tie-up that allows people to link together their music with their running shoes and collect data to plan their fitness schedule.

“My daughter has a relationship with Nike; she goes to buy shoes. Her shoes are smart, they tell her how she’s running, she goes into a store to interact with a NIke running specialist,” says Tapscott. “She collects data, she has a GPS and she knows how her running is going. This is a lot more than a product.”

Only by making sure that products and services are linked together to produce a greater engaging experience can modern marketing succeed, states Tapscott bluntly. The future is about companies in every sector taking this philosophy into their business area, even if this is outside technology and entertainment. He warns: “It’s about a whole new way of thinking.”

Don Tapscott’s words of wisdom:

– Privacy is going to become a really important issue for younger generations

Tapscott warns that this topic is becoming a “whole new weird frontier” for the direct marketing industry, where marketers must take a role in educating young people about how to maintain their privacy. With so many people giving away data about themselves on Facebook profiles or through Twitter, Tapscott says that DM marketers need to take a leading role in educating them and act responsibly in an era of too much – rather than too little – information. He warns: “You need to have integrity baked into your bones.”

– This is the first time that the younger generation has known more than an older one

Normally, education passes down from older people to younger ones. But Tapscott says that marketers must accept that this may be the first time that the youth of the UK is more advanced in its understanding of technology and media than the elder business community. He comments: “We’ve got a generation ‘lap’ where kids are out-lapping their parents.” As such, marketers must not be afraid of asking for help from those who see the internet as the “birthright of their generation”.

– Don’t dismiss what you don’t understand

Tapscott says that far from being a generation of over-privileged kids with a lack of attention span as depicted in books such as The Dumbest Generation, those people who have grown up with the internet are simply gaining life skills in a different way from before. He gives the example of the online massively multiplayer online game (MMOG) World of Warcraft. While this might first be seen as a waste of time by concerned parents, Tapscott explains that WoW players are “mini-chief executives” in training. He says the game, where people lead their virtual troops into battle, organise other players and develop a plan for action requires youngsters to adopt “strategy, execution, project management, human resources and marketing” skills.

– Expect to find your firm’s talent outside the organisation as well as inside

Tapscott argues that marketers can no longer expect all the good ideas to come from within the marketing department. “Talent can be inside but also outside,” he says. He claims that some of the brightest ideas can come from those beyond the walls of the business. By building up relationships over long periods – through LinkedIn, Twitter or other means – both people and ideas stay linked together beyond the lifespan of a particular job.